An Annual Report is quite literally a report about your company\u2019s financial year. The word \u201cannual\u201d refers to a year and \u201creport\u201d to an overview.<\/p>\n
In its essence the Annual Report serves quite a few purposes. First and foremost it\u2019s a general overview of the financial year and an answer to the question \u201cHow it went?\u201d<\/p>\n
But an Annual Report also serves a purpose to different interest groups who are interested in specific information about some certain area \u2013 your suppliers are interested in how your sales are doing, your employees about all your obligations and liquid cash etc. It may also be that you started with a new product line and your financers are keen to know how it went. Hence it\u2019s always suggested to comment all your main products, revenue streams and activities. An Annual Report serves also statistical information purpose to government officials \u2013 it\u2019s about how many people you employee, what you pay as their salary, how much have you borrowed money etc.<\/p>\n
It\u2019s all put together in a format of a document that starts off with the main statements, explains how numbers are reached (in other words which accounting principles are used) and goes into more detail with all relevant figures in the notes to the financial statements.<\/p>\n